Pelosi Likes Idea of 'Car Czar' to Audit Bailout

WASHINGTON (AP) - House Speaker Nancy Pelosi touted the notionof a "car czar" Tuesday to supervise an auto industry bailout,saying Big Three executives haven't adapted well to changingconditions. As United Auto Workers President Ron Gettelfinger voiced freshconfidence that an accommodation will be reached on a $15 billionbailout bill, Pelosi told interviewers it's more critical than everthat change in Detroit be forced. "I think it's very important," Pelosi, D-Calif., told NBC's"Today" show. She maintained little would be accomplished ifcompany executives were "left to their own devices." Pelosi appeared on morning television after a night of intenseCapitol Hill discussions aimed at narrowing differences onlegislation to rush short-term loans to the struggling carmakers.The plan would require that the industry reinvent itself to survive- and that it pay back the government if it doesn't. The packagecould come to a vote as early as Wednesday. Pelosi said she thought taxpayers should consider it "a secondchance" for the industry, rather than a bailout. Cash from any such rescue plan would immediately be plowed intoGeneral Motors Corp. and Chrsyler LLC. Ford Motor Co. has said thatit does not have an emergency cash-flow problem and that it wouldnot ask for short-term assistance. In testimony before Congress last week, General Motors andChrysler, which have said they are weeks from collapse, made itclear they would need a total of $14 billion to $15 billion tosurvive through early 2009. "We do not face a near-term liquidity issue, and we will not beseeking a short term bridge loan," the company said in a statementMonday night. "But Ford fully supports an effort to address thenear-term liquidity issues of GM and Chrysler, as our industry ishighly interdependent and a failure of one of our competitors couldaffect us." Robert Lutz, GM's vice president of global product development,also said he could accept a federally appointed czar to superviseimplementation of a restructuring plan. "Well, whether we need it or not, I think it's reasonable thatwhen the federal government steps in with taxpayer money, they'renot going to--they're not going to lend us the money and just say,`Do the best you can with it and tell us when you need more.'Obviously, there's going to be some kind of oversight and I thinkthat's a reasonable thing to expect," he said on CBS's "The EarlyShow." The measure being discussed in Congress would put a governmentoverseer named by President George W. Bush in charge of settingguidelines for an industrywide overhaul, with the power to revokethe loans if the automakers fail to do what's necessary to becomeviable. The White House was seeking tougher consequences, includingallowing the overseer - being called a car czar - to force thecompanies into bankruptcy if they weren't doing enough to cut laborcosts, restructure their debt and downsize to stay afloat. Pelosi said she had no candidates for the job, but said thatPaul Volcker, a former Federal Reserve chairman and now an economicadviser to President-elect Barack Obama, would be a good choice.She said he enjoys the public's confidence. Despite optimism on both sides that Congress and the White Housecould reach a swift agreement on the rescue package, it was still atough sell on Capitol Hill. With lawmakers in both parties bitterover the administration's use of the $700 billion Wall Streetbailout, many of them were preparing to hold their noses and votefor yet another federal rescue to avert deeper economic disaster. "While we take no satisfaction in loaning taxpayer money tothese companies, we know it must be done," Senate Majority LeaderHarry Reid, D-Nev., said. "This is no blank check or blind hope." Gettelfinger, who appeared Tuesday on CBS, declined to saywhether his union would demand a seat on GM's board of directors inexchange for contract concessions. But he did say that "if we'regonna be asked to give up more, and it appears that we are, then weshould have an equity stake in the company." The developing plan would dole out auto industry loans rightaway, drawing the money from an existing program meant to help thecarmakers retool their factories to produce more fuel-efficientvehicles. Then the czar would write guidelines, due on the first ofthe year, for restructuring the companies. The proposal would attach an array of conditions to the autobailout money, including some of the same restrictions imposed onbanks as part of the Wall Street rescue. Among them are limits onexecutive compensation, a prohibition on paying dividends, andrequirements that the government share in future profits andtaxpayers be repaid before any other shareholders. The proposal gives the car czar say-so over any major businessdecisions by the automakers while they're taking advantage offederal aid. The companies would have to open their books to thegovernment, including informing the overseer of any transaction of$25 million or more. Also under discussion is a requirement that the carmakers takingfederal aid get rid of their corporate jets - which became a potentsymbol of the industry's ineptitude when the Big Three CEOs usedthem for their initial trips to Washington to plead before Congressfor government assistance. Still, the White House wanted clearer consequences for theautomakers if a company was not meeting its own promises forlong-term viability, according to officials who would comment onthe continuing negotiations only on condition of anonymity. Under Democrat's proposal, if the Big Three didn't come up withsuitable restructuring plans by the end of March, the czar wouldhave to submit his own blueprint to Congress for agovernment-mandated overhaul. Sen. Carl Levin, D-Mich., a key ally of the auto industry, saidgetting the roughly 15 Republicans needed to support the plan wasan uphill battle. "This is a real hill to climb even if we can get agreementbetween the White House and congressional leaders," he said. --- Associated Press writer Ben Feller contributed to this report.

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